JAMB UTME - Commerce - 2022

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The result of dividing the cost of sales by the average stock is the rate of turnover. This calculation measures how efficiently a company is using its inventory to generate sales. The cost of sales is the direct cost of producing or purchasing the goods that are sold by the company, while the average stock is the average value of inventory held by the company over a given period of time. By dividing the cost of sales by the average stock, we can determine how many times the company's inventory was sold and replaced during that time period. This is the rate of turnover. A high rate of turnover indicates that the company is efficiently selling and replenishing its inventory, which can lead to higher profits and better cash flow. On the other hand, a low rate of turnover may indicate that the company is struggling to sell its inventory or is holding onto it for too long, which can lead to higher costs and lower profits. Therefore, it's important for companies to monitor their rate of turnover and aim for an optimal level based on their industry and business model.

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An association formed by computer distributors to safeguard and promote their interest is a trade association. A trade association is a group of companies in a specific industry who come together to address common issues and goals. Trade associations are formed to promote the interests of their members, which can include advocating for favorable laws and regulations, providing networking opportunities, offering educational resources and training, and working to improve the overall reputation of the industry. In the case of computer distributors, a trade association could be formed to represent their interests and help them grow and succeed in the industry.

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When a share with a nominal value of #50 is quoted at #70, it is being sold at a premium. A share is quoted at a premium when its market price is higher than its nominal or face value. In the case of a share with a nominal value of #50 that is quoted at #70, the share is being sold for a higher price than its face value, meaning that it is being sold at a premium. This can indicate that the company is performing well, and that investors are willing to pay a higher price for the share due to its perceived future potential. On the other hand, a share that is quoted below its nominal value is said to be sold at a discount.

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The average stock is derived by adding the opening stock to the closing stock and then dividing the sum by two. The opening stock is the value of inventory at the beginning of an accounting period, while the closing stock is the value of inventory at the end of the accounting period. The average stock is the value of inventory that a business holds on average during the accounting period. By adding the opening and closing stock and then dividing by two, a business can calculate the average stock value. This calculation is used in various accounting and financial ratios, such as inventory turnover ratio and gross profit ratio. These ratios help a business to analyze its inventory management and profitability. The other options provided in the question are not correct methods to calculate the average stock value. The first option is the average of closing stock and purchases, which does not include the opening stock. The second option is the ratio of closing stock to opening stock, which does not provide an average value. The fourth option is the difference between opening stock and purchases, which also does not include the closing stock value.

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The answer is group insurance. Group insurance is a type of insurance policy where a company insures the lives of all its employees collectively. In a group insurance policy, the company pays the premiums and the coverage applies to all eligible employees. This type of insurance provides a cost-effective way for companies to offer life insurance protection to their employees and can be a valuable employee benefit. Group insurance policies can be customized to meet the specific needs of the company and its employees, making it a flexible and convenient option for companies looking to offer life insurance benefits.

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The characteristic of a commercial bank that is not correct is "Established to issue bank notes." A commercial bank is a financial institution that is established as a limited liability company, which means that the owners or shareholders are not personally responsible for the bank's debts or losses. It is usually established by individuals or organizations to provide a range of financial services such as accepting deposits, granting loans, and offering various investment products. One of the primary objectives of a commercial bank is to make a profit through the various services it provides. However, commercial banks do not have the authority to issue bank notes. The authority to issue bank notes is given to the central bank of a country, which is responsible for regulating the country's money supply and ensuring the stability of the financial system. Therefore, the correct option is "Established to issue bank notes."

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Public enterprises are the organizations that provide essential goods and services at low cost to citizens. These are government-owned and operated entities that are established to serve the public interest and meet the needs of the community. Public enterprises are typically created to provide goods and services that are considered essential to the public, such as electricity, water, transportation, healthcare, and education. By providing these goods and services at a lower cost, public enterprises can help to ensure that all citizens have access to the resources they need to live and thrive. Thrift societies, cooperative societies, and private companies may also provide essential goods and services, but they are not typically required to do so at a low cost to citizens, as they are not necessarily established to serve the public interest.

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Working capital = Current assets - Current liabilities
= (debtors + cash in hand + closing stock ) - ( overdraft + creditors)
= (10,000 + 5,000 + 10,000 ) - (8,000 + 12,000)
= 25,000 - 20,000
= 5,000

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The type of retail business that sells goods by post using a catalogue is called a "mail order firm." A mail order firm is a company that allows customers to purchase goods from a catalogue without visiting a physical store. Customers can browse through a catalogue or an online store, select the items they want to buy, and place an order. The goods are then delivered to the customer's address by post or courier. The catalogue typically contains pictures and descriptions of the products that the company offers for sale. Customers can choose to pay for the goods using a variety of payment options, such as credit card, debit card, or bank transfer. Mail order firms are popular because they offer convenience to customers who may not have the time or ability to visit a physical store. They also offer a wider range of products than a physical store because they can source products from all over the world. In summary, a mail order firm is a retail business that sells goods by post using a catalogue or online store, allowing customers to purchase products without visiting a physical store.

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One of the products of the construction industry is a bag of cement. The construction industry produces a wide range of products and materials that are used in building and construction projects. One of the key products of the construction industry is cement, which is used as a binding agent in concrete and mortar. Cement is an essential component of many construction projects, and is used in the construction of buildings, bridges, roads, and other structures. The production of cement and other construction materials is a major component of the construction industry and plays a critical role in the growth and development of the sector.

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A person engaged for the purpose of bringing his principal and a third party into a contractual relation is an "agent." An agent is a person who is authorized to act on behalf of another person or entity, known as the principal. The agent's role is to negotiate and enter into contracts with third parties on behalf of the principal, while representing the interests of the principal. In other words, an agent acts as a middleman between the principal and a third party. The agent has a fiduciary duty to act in the best interests of the principal, which means that they must act honestly and with reasonable care and skill. Examples of agents include real estate agents, who act on behalf of property owners to sell or lease their property to interested buyers or tenants. Another example is a travel agent, who acts on behalf of travelers to book flights, hotels, and other travel services. In contrast, an arbiter is a person who is appointed to settle disputes between parties, such as a mediator or an arbitrator. An auctioneer is a person who conducts auctions and facilitates the sale of goods or services to the highest bidder. A middleman is a general term that refers to a person or business that acts as an intermediary between two parties in a transaction.

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A contract will not be discharged through performance if one or both parties do not fully fulfill their obligations as specified in the agreement. In this case, the contract may still be considered valid and enforceable, and the non-performing party may be held liable for damages or breach of contract. However, if both parties agree to modify the terms of the contract or to release each other from their obligations, the contract may be discharged through agreement. Additionally, a contract may be discharged through acceptance, which occurs when both parties agree to terminate the contract by mutual consent. Finally, a contract may be discharged through breach if one party fails to fulfill their obligations and the other party chooses to terminate the contract as a result.

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The quality of money that makes it possible to buy goods in small quantities is divisibility. Divisibility means the ability of money to be divided into smaller units. This is important because it allows people to buy goods that cost less than one unit of money. For example, if a candy bar costs 50 cents and you only have a one dollar bill, you can divide that dollar into smaller units (quarters, in this case) to pay for the candy bar. If money was not divisible, you would have to pay for the candy bar with a one dollar bill, even if you only wanted to buy 50 cents worth of goods.

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An internal source of finance to an entrepreneur is retained earnings. This refers to the profit that a business keeps and re-invests into the business, rather than distributing it as dividends to shareholders. Retained earnings can be used to finance a variety of business expenses, such as expanding operations, acquiring new assets, or developing new products. This type of financing is considered internal because it comes from within the business, rather than from external sources like loans or investments. Retained earnings are a flexible source of financing that do not have to be repaid and do not come with any interest or repayment obligations.

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The share value stated on a share certificate is called the nominal value. Nominal value, also known as face value or par value, is the minimum amount at which a company's shares can be issued and is typically stated on the share certificate. The nominal value is a fixed value assigned to the shares when they are first issued and it serves as the legal capital of the company. It is used to calculate the company's share capital and to determine the amount of dividends to be paid to shareholders. The market value of a share, on the other hand, is the current value of the share in the stock market, which can be higher or lower than the nominal value. The market value is determined by the forces of supply and demand, and can change frequently based on a variety of factors such as the company's financial performance, economic conditions, and investor sentiment.

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A discount deducted from the invoice price of goods to enable the retailer to make a profit is called a "trade discount." Trade discounts are given to retailers or wholesalers to encourage them to buy large quantities of goods at a lower price. The discount is usually a percentage of the list price, which is the price that the manufacturer sets for the goods. The retailer or wholesaler can then sell the goods at a higher price to their customers, and the difference between the list price and the discounted price is their profit margin. Trade discounts are different from cash discounts, which are offered to customers who pay for their purchases in cash or within a certain period of time. Trade discounts are also different from seasonal discounts, which are offered to customers during certain times of the year, and functional discounts, which are offered for various reasons such as early payment or volume purchases. In summary, a trade discount is a discount given to retailers or wholesalers to encourage them to buy large quantities of goods at a lower price, enabling them to sell the goods at a higher price and make a profit.

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A retail store that sells only one product from a particular manufacturer is called a tied shop. This means that the store has an exclusive agreement with the manufacturer to sell only that specific product. Tied shops are commonly found in industries such as electronics, where manufacturers may have flagship products that they want to showcase in dedicated stores. By having a tied shop, the manufacturer can have more control over the presentation of the product and ensure that customers have a consistent experience. Customers who are interested in purchasing that particular product can visit the tied shop with the assurance that they will find the product they are looking for. Therefore, the correct option is tied shop.

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The issue of a prospectus by a company is an invitation to members of the public to subscribe to the company's shares. A prospectus is a legal document that a company must produce and distribute to potential investors when it is issuing new shares to the public. The prospectus contains important information about the company, its business, its financial performance, and the terms and conditions of the share offering. It is intended to provide potential investors with all the information they need to make an informed decision about whether or not to invest in the company's shares. Therefore, when a company issues a prospectus, it is inviting members of the public to subscribe to its shares by buying them. By doing so, investors become part-owners of the company and are entitled to a share of the company's profits and voting rights at shareholder meetings.

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The right of a consumer that is not listed among the options is the "right to buy on credit." Consumer rights are the legal protections and entitlements afforded to individuals who purchase goods and services. These rights vary depending on the country or region, but they generally include protections against fraud, misrepresentation, and defective products. The other three options listed - the right to a fair hearing, the right to obtain a replacement, and the right to a safe product - are all recognized as fundamental consumer rights in many countries around the world. The right to a fair hearing means that consumers have the right to be heard and have their complaints addressed in a fair and impartial manner. The right to obtain a replacement means that consumers have the right to seek a replacement or refund for a product that is defective or does not meet their expectations. The right to a safe product means that consumers have the right to expect that the products they purchase will not pose a risk to their health or safety. The right to buy on credit, on the other hand, is not generally considered a fundamental consumer right. While many consumers have access to credit as a means of financing their purchases, there is no legal entitlement to buy on credit. Consumers may be required to meet certain criteria, such as a good credit score or a steady income, in order to qualify for credit.

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The answer is personal selling. Personal selling refers to a face-to-face interaction between a seller and a buyer for the purpose of making a sale. In personal selling, the seller has the opportunity to build a relationship with the buyer, understand their needs and wants, and tailor their sales pitch to meet those needs. This type of selling is often used for high-value or complex products, where a more personal touch is needed to close the sale.

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Dealers in the stock exchange such as bulls, bears, and stags are categorized as "speculators." Speculators are individuals or entities who buy or sell financial assets, such as stocks, bonds, or commodities, in the hope of making a profit from price fluctuations. They are often motivated by the potential for high returns, but they also face significant risk due to the volatility of financial markets. In the context of the stock exchange, bulls are speculators who believe that stock prices will rise, and therefore buy stocks in the hope of selling them later at a higher price. Bears, on the other hand, are speculators who believe that stock prices will fall, and therefore sell stocks in the hope of buying them back at a lower price. Stags are speculators who buy stocks at the time of the initial public offering (IPO), hoping to sell them later at a profit when the price goes up due to high demand. In contrast, an actuary is a professional who uses mathematical and statistical methods to analyze and assess financial risk, usually in the context of insurance or pension plans. Promoters are individuals or companies who promote and market a particular product, service, or idea to the public. An underwriter is a financial institution or individual who assumes the risk of buying new securities from a company and reselling them to the public. They are not typically involved in the buying and selling of securities on the stock exchange.

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An undertaking to repair a customer's vehicle for a certain period after it has been sold is called after-sales service. After-sales service refers to the support and assistance provided to customers after they have purchased a product, such as a vehicle. This can include repair and maintenance services, as well as customer support and troubleshooting. The goal of after-sales service is to ensure customer satisfaction and to retain customer loyalty by providing ongoing support and assistance. The other options - marketing mix, market segmentation, and sales promotion - are all related to marketing and sales, but they do not specifically refer to after-sales service. The marketing mix refers to the various elements of a marketing plan, such as product, price, place, and promotion. Market segmentation refers to the process of dividing a market into smaller groups of consumers with similar needs or characteristics. Sales promotion refers to short-term incentives to encourage the purchase of a product or service.

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Sea vessels that do not operate on regular times and routes are called tramps. Tramp ships are essentially freighters that do not have a fixed schedule or specific ports of call. Instead, they are hired by cargo owners or shipping companies to transport goods to various destinations around the world. Tramp ships are often used to transport bulk cargo, such as coal, grain, or ore, and are known for their flexibility and cost-effectiveness. Because they do not have fixed schedules, tramp ships can be hired at short notice and can be rerouted to different destinations as needed. In contrast, ocean liners, container ships, and ferries all operate on regular routes and schedules. Ocean liners are large passenger ships that transport passengers and cargo on fixed routes, while container ships are used to transport standardized shipping containers on specific routes. Ferries, on the other hand, are typically used to transport passengers and vehicles across shorter distances, such as between nearby ports or islands. Overall, tramp ships provide a valuable service for companies that need to transport goods around the world, but do not require the regular schedules or specific routes of other types of ships.

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The activity that improves the appearance of a product and aims to protect it is "packaging." Packaging refers to the process of enclosing a product in a container, wrapper, or other material for the purposes of protection, storage, distribution, and display. Packaging can take many forms, from simple plastic bags to elaborate boxes and displays. One of the primary functions of packaging is to protect the product from damage or contamination during storage and transportation. This can include protection from moisture, dust, and other environmental factors that could damage the product. Additionally, packaging can also protect the product from tampering or theft. Another important function of packaging is to improve the appearance of the product. Packaging can be designed to attract attention, communicate information about the product, and create a favorable impression on the customer. This can include the use of graphics, colors, and other design elements to create a distinctive and appealing visual identity for the product. The other options listed - advertising, grading, and labelling - are all important activities in the marketing and distribution of products, but they do not specifically relate to the physical protection and appearance of the product, which is the main focus of packaging.

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A group of sellers who pool their resources to buy goods in large quantities and sell to its members is called a "wholesaler cooperative society". A wholesaler cooperative society is a type of organization formed by a group of sellers to purchase goods in large quantities and sell them to their members. Members of a wholesaler cooperative society are usually retailers or other small business owners who need to purchase goods in large quantities to sell in their own businesses. By pooling their resources, members of a wholesaler cooperative society can negotiate better prices and purchase goods that might not be available to them individually. The cooperative then sells the goods to its members at a markup, but still at a lower price than they would pay if they bought the goods individually. In summary, a "wholesaler cooperative society" is a group of sellers who work together to buy goods in bulk and sell them to their members, usually retailers or small business owners, at a lower price than they would be able to obtain individually.

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The resources put together to create goods and services are called "factors of production." Factors of production refer to the various inputs that are used in the production process to create goods and services. The main factors of production are land, labor, capital, and entrepreneurship. Land refers to all the natural resources used in the production process, such as water, minerals, and land itself. Labor refers to the human effort and skills that are used in the production process. Capital refers to the physical assets, such as buildings, machinery, and equipment, that are used in the production process. Entrepreneurship refers to the management and organization of the other factors of production. Together, these factors of production are used to create goods and services. Without the factors of production, it would not be possible to create the products and services that we rely on in our daily lives.

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The correct answer is: "cash and trade debtors." Current assets are resources that a company expects to convert into cash or use up within one year or a normal operating cycle. These assets are important for a company's day-to-day operations and can be easily converted into cash. Examples of current assets include cash, accounts receivable (trade debtors), inventory, and prepaid expenses. Out of the options provided, "cash and trade debtors" are current assets because they can be easily converted into cash within a year or a normal operating cycle. Cash is the most liquid current asset as it can be used to pay for immediate expenses or investments. Trade debtors, also known as accounts receivable, are the amounts owed to the company by its customers for goods or services sold on credit. The company expects to receive payment within a year or normal operating cycle, making it a current asset.

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The growth of commerce is not enhanced by low per capita income. Per capita income refers to the average income earned per person in a given area or population. Low per capita income can be a hindrance to the growth of commerce, as it means that people have less disposable income to spend on goods and services. When people have less money to spend, demand for goods and services decreases, which can negatively impact the growth of commerce. On the other hand, factors such as the development of modern forms of production, government participation in business, and high population growth can positively impact the growth of commerce.

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A partner who only contributes their name to the formation of a partnership is known as a nominal partner or a sleeping partner. They don't actively participate in the management or operations of the partnership, but they are still considered a full partner and have equal ownership in the business. This means they share in the profits and losses of the partnership and are liable for its debts. However, because they don't have an active role, they also don't have much control over the day-to-day decision making of the business.

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The objective of the Niger Basin Commission is to regulate and promote the sustainable development of the Niger River and its basin. This includes managing and protecting the natural resources within the basin, such as water, soil, and biodiversity, and promoting economic and social development in the region through projects and initiatives that are environmentally friendly and socially equitable. The Commission also aims to facilitate cooperation and coordination among the countries that share the Niger River and its basin, with the goal of ensuring peaceful and sustainable use of the resources within the basin for the benefit of all. Therefore, the correct option is regulating the sustainable use of natural resources and promoting economic and social development in the Niger River Basin.

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The safe keeping of goods produced until they are needed is called warehousing. Warehousing involves the storage of goods and materials in a secure and controlled environment, typically a warehouse or distribution center, until they are ready to be sold, distributed, or used in production. The purpose of warehousing is to provide a safe and secure location for goods and materials, as well as to manage inventory levels and ensure that the right products are available when they are needed. Warehouses may also provide additional services, such as packaging, labeling, and assembly, to prepare products for distribution. Overall, warehousing is an important component of the supply chain and plays a critical role in ensuring that goods are available to meet customer demand.

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The law by which a seller transfers the property in goods to a buyer at an agreed price is the "Sale of Goods Act." The Sale of Goods Act is a law that governs the sale of goods in many countries around the world. It sets out the rules for transferring ownership of goods from a seller to a buyer in a commercial transaction. The law applies to both tangible goods, such as cars and furniture, and intangible goods, such as software and intellectual property. Under the Sale of Goods Act, a seller is required to transfer ownership of the goods to the buyer at an agreed price. This means that the buyer has the right to own and possess the goods, and the seller must transfer the goods to the buyer in exchange for payment. The law also sets out rules for the quality and condition of the goods, and provides legal remedies for buyers who receive defective or faulty goods. The other options listed - Weights and Measures Act, Trade Description Act, and Foods and Drugs Act - are laws that relate to different aspects of commercial transactions, such as measurement standards, consumer protection, and food safety. However, they do not specifically address the transfer of ownership of goods from a seller to a buyer, which is the main focus of the Sale of Goods Act.

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The payment made to a carrier for the transportation of goods is called "freight." Freight is the amount of money that is paid by a shipper or consignee to a carrier, such as a trucking company or shipping line, for the transportation of goods from one place to another. Freight charges are typically based on the weight, volume, and distance of the shipment, as well as any additional services or requirements that may be necessary. Freight charges can be calculated in a variety of ways, depending on the mode of transportation and the specific terms of the contract between the shipper and the carrier. For example, freight charges for trucking companies may be based on the weight of the shipment, while freight charges for ocean shipping may be based on the volume of the shipment or the number of shipping containers. Freight charges can also include additional fees and charges for services such as packaging, loading and unloading, customs clearance, and insurance. These charges are typically negotiated and agreed upon between the shipper and the carrier before the shipment is made. In summary, the payment made to a carrier for the transportation of goods is called "freight." Freight charges are based on the weight, volume, and distance of the shipment, as well as any additional services or requirements that may be necessary. Freight charges can also include additional fees and charges for services such as packaging, loading and unloading, customs clearance, and insurance.

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An advertisement which is geared towards a particular audience is known as direct advertising. This type of advertising is specifically tailored to appeal to the interests, needs, and desires of a particular target market or demographic. The goal of direct advertising is to create a personalized message that will resonate with the intended audience, and to encourage them to take action, such as making a purchase or visiting a website. Direct advertising can be delivered through a variety of channels, such as email, social media, direct mail, or targeted online ads. By focusing on a specific audience, direct advertising can be more effective in generating leads and driving sales than mass advertising, which aims to reach a broad and diverse audience.

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The service of a retailer is part of production because it "enables finished goods to reach consumers." Retailers are businesses that sell finished goods directly to consumers, usually in small quantities. They purchase goods from manufacturers or wholesalers and then sell them in their stores or online. The service of a retailer is important because it provides a way for finished goods to reach the end consumer, which is the ultimate goal of production. Without retailers, manufacturers would not be able to sell their finished goods directly to consumers, and consumers would have limited access to the goods they need and want. Retailers serve as a crucial link between producers and consumers, by making finished goods available to consumers in convenient locations. Therefore, the service of a retailer is an integral part of the production process because it enables manufacturers to sell their finished goods and allows consumers to access and purchase those goods. While retailers may not directly create the finished goods, they play a vital role in bringing them to market and making them available to consumers. In contrast, a commercial occupation refers to any occupation or business activity that is engaged in for the purpose of making a profit. While retailing is a commercial occupation, it is also an important part of the production process because it enables finished goods to reach consumers.

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The principle which prevents an insured from receiving a claim that is more than the value of the loss, if the property is insured by more than one company is called contribution. Contribution refers to the principle in insurance law that requires insurers to share the cost of a loss when multiple insurance policies cover the same property. The idea is that an insured should not be able to profit from insuring the same property with multiple companies. The principle of contribution ensures that the total amount received from multiple insurance policies does not exceed the value of the loss. The other options - indemnity, proximate cause, and uberrimae fidei - are also related to insurance law, but they do not specifically refer to the principle of contribution. Indemnity refers to the principle that an insurance policy should restore the insured to the same financial position they were in prior to the loss. Proximate cause refers to the cause of a loss that is considered the most significant or primary cause, and is therefore covered by insurance. Uberrimae fidei is the legal principle that requires an insurance policy to be based on utmost good faith, meaning that the insured must disclose all material facts to the insurer when applying for insurance.

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The document issued by a public company allowing it to commence business is called the "Certificate of Incorporation." When a group of people decides to form a company, they must register it with the government. The process of registering a company involves submitting documents to the government, including the company's Memorandum of Association and Articles of Association. These documents outline the company's purpose, structure, and internal regulations. Once the government approves the registration and verifies that all necessary documents have been submitted, it issues a "Certificate of Incorporation" to the company. This certificate officially recognizes the company as a legal entity and grants it the authority to commence business operations. In summary, the "Certificate of Incorporation" is a crucial document that allows a public company to legally operate and conduct business.